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The Blockchain Challenge for Software Suppliers

The Blockchain Challenge for Software Suppliers

In the third and final blog post of our blockchain series, General Manager Leigh Roberts shares his thoughts on why blockchain would be difficult to implement for agriculture in the UK.

As can be seen from the examples in my previous blockchain post, the technology does fit the supply chain industry model well. However, in reality, deployment is very complex and requires a top-down, all-or-nothing approach.

Is blockchain implementation feasible in the UK agriculture industry?

The problem with getting blockchain off the ground in this sector as it stands is that there are lots of players and food producers operating independently. Industry-wide implementation of this new technology would require a big drive from the top of the food industry that could be pushed back through the supply chain.

However, it is debatable whether the UK agriculture industry is ready for wide-scale adoption of this new technology. For example, if we look at attempts in recent years to set up the digital eGrain passport system, the trials experienced various hurdles on both a technical and an organisation level. I believe that these difficulties would only be intensified with the implementation of blockchain.

Blockchain is a disruptive technology and as such may require a new startup to come along and build a suite of solutions to attempt to win a market share. Failing this, there is currently no incentive for industry players to invest in blockchain. The benefits simply don’t justify the cost when there are existing solutions such as those from Primetics that already offer an excellent degree of automation, transparency and effective information flow.

If anything, the best solution would be attempting to build a blockchain functionality into existing software solutions like those offered by Primetics, which are already proven and have been supporting the industry for over 25 years.

Other possibilities for blockchain

Perhaps a more feasible use of blockchain in the agriculture industry here would be as a distributed ledger for accounting. Monetary exchange is crucial in the industry and is an integral part of managing cash flow, profitability, margins and risk for agribusinesses. This type of application would mirror more closely existing blockchain applications and could therefore be easier to develop and implement in the agriculture industry.

Other, more distinct areas that could work well with blockchain include areas such as crop inputs and pesticides. It could also take off more in the veterinary/pet industry – the UK are a nation of dog and cat lovers and there is lots of money in this sector, which could be used towards investment in new blockchain technology.

I hope you’ve found our blockchain series interesting. Whilst blockchain is certainly an exciting and innovative now technology, I’m not convinced that it is the right fit for the UK agriculture industry at the moment. On the other hand, there are still fantastic opportunities for technology to really help UK agribusinesses grow and prosper – something which Primetics is proud to be at the forefront of.

How Could Agribusinesses Take Advantage of Blockchain?

How Could Agribusinesses Take Advantage of Blockchain?

In the second blog of our blockchain series, Leigh talks about the ways in which blockchain could potentially be used in agriculture, as well as whether these could actually be implemented in the UK agriculture market.

In the last blockchain blog, I outlined the basic concept of blockchain, how it differs from more traditional technologies and why people are beginning to adopt it.

In this post I’m going to talk about the potential uses of blockchain in agriculture – which I feel are limited due to the number of individual stakeholders in the industry, not to mention the need for a large initial investment in an unproven new technology.

Supply chain traceability

The most likely use of blockchain in the agriculture industry is in the supply chain: using a shared database to ensure traceability, transparency and accountability.

Last year, for example, following a contaminated lettuce scare, American store Walmart announced that they are going to start using blockchain to track vegetables from field to store. Their system aims to achieve real-time, end-to-end traceability along the supply chain to retrieve information more quickly and eliminate errors and duplicity.

Smart contracts

In Brazil, blockchain has also been used to create a business network for the aggregation of data on grains. The Brazilian Grain Exporters Network (BGEN) built a system that used blockchain smart contracts to facilitate a better flow of information between members of the network. A case study on the network concluded that the use of blockchain resulted in fewer information asymmetries and improved trust in the network.

More efficient and accurate information sharing

Downunder in Australia, their agriculture industry has the scale and capability that means they are looking to become an early adopter of blockchain. Their National Farmers’ Federation has announced that blockchain will be a key technology for the industry moving forward, and several initiatives are already underway.

One of these is Agrichain (formerly BlockGrain), a company which seeks to automate the sharing of information across the agricultural supply chain and is already being used by around 1000 Australian farmers.

While countries such as the US, Brazil and Australia have agriculture industries with the scale to look at adopting blockchain, I don’t believe that it is currently feasible in the UK. Where these larger countries are seeing big companies investing in this new, disruptive technology, the UK agriculture industry comprises of multiple smaller players, and I believe that it is unlikely that everyone will get behind this one technology.

In the third and final blog of the blockchain series, The Blockchain Challenge for Software Suppliers, I will look in more detail at why it would be so difficult to adopt blockchain across the agriculture industry in the UK.

What Is Blockchain?

What Is Blockchain?

Welcome to the first blog in our blockchain series. In this series of blogs posts, Primetics General Manager Leigh Roberts talks about what blockchain is, how it could be used in the agriculture industry, and the challenges of implementation.

Blockchain is currently a hot topic. People from all different sectors are talking about it, heralding it as the future.

However, there is still quite a bit of confusion about what blockchain actually is. I’ve recently been learning lots about blockchain and how it could impact on the agriculture industry.

I decided to write a series of blogs about blockchain to explain what it is, how it is used, the possibilities it might bring for agriculture and its potential pitfalls.

So first things first: what is blockchain?

Put as simply as possible, blockchain technology refers to a list of records (‘blocks’) linked together using cryptography (making the ‘chain’). The records are stored in multiple locations at once and controlled by multiple parties, or ‘nodes’. This makes it very secure, because transactions or changes have to be approved by everyone in the network, and there are more people to spot anomalies in the network.

blockchain diagram

How is a blockchain structured?

As mentioned, a blockchain is made up of a series of records, referred to as ‘blocks’. A block is a chunk of data that is identified using cryptographic ‘hashes’.

A block contains three pieces of information:

  • The data being stored
  • The block’s unique identifying hash
  • The hash of the previous block

blockchain block

So let’s break that down

The data being stored can be any information, so will differ depending on the industry and application of the particular blockchain.

As the most famous use of blockchain is the cryptocurrency bitcoin, let’s use that as an example. In a bitcoin transaction, the data of a block will record data about bitcoin transactions that have been made (usually about 500 transactions are recorded in one block).

The block’s unique identifying hash is a unique combination of letters and numbers that identifies the block and includes a timestamp. It is generated using the hash of the previous block, in order to place it in the right place in the blockchain.

The hash of the previous block is also included in the block, again to show where the block occurs in the chain.

The creation of a block requires all of this information, plus the approval of a majority of members of the network.

Any edits to a block also require approval, so they don’t happen very often and are difficult to carry out – meaning that information stored in the blockchain cannot be easily accidentally duplicated or hacked.

How does blockchain work?

Now that you know the structure of blockchain, it is important to understand how it works. One of the key features of blockchain technology is that it is what is known as a distributed ledger. To put it simply, this means that it is a database which exists across several locations or is shared among multiple participants.

blockchain international node diagram

How is this different to other types of software?

Most businesses and companies use a database which is centralised and lives in one fixed location.

In blockchain, the blocks that make up the chain become part of a shared database which all involved parties have access to at the same time.

Those computers that have access to the chain and oversee all transactions are referred to as nodes or miners.

Every new data entry must be confirmed by a majority of nodes before it is encrypted with a unique hash.

The reason that maliciously editing the blockchain is so difficult is that must be approved by a majority. This makes it very secure, and is the biggest difference between blockchain and a traditional database.

Why is it becoming popular?

Lots of businesses and organisations are beginning to explore blockchain because it is very secure, reduces risk of errors, promotes transparency and cuts down on operational inefficiencies.

Could it be used in agriculture?

There is potential for blockchain to deployed in a range of different industries. In the agriculture industry, one potential application of the technology is for supply chain management. The increased transparency and efficiency of blockchain has the potential to further improve the traceability of produce and create accountability along the supply chain.

We’ll look into this more in the second blog of our blockchain series: How Could Agribusinesses Take Advantage of Blockchain?, along with other possible uses of blockchain in the agriculture industry.

For all its strengths, like many technologies, blockchain has significant flaws also. In the third and final blog of the blockchain series, The Blockchain Challenge for Software Suppliers, we will also touch on what I believe those to be.